Monitoring a position after execution

As regular readers know, all wave counts are work-in-progress. I identified 32.55 as a low-risk buy in Silver before it happened with the count that an extended 5th wave was highly likely to finish there. Sure enough, we got a smart rally to 33.10. It was possible to make out that this move was made up of 5 sub waves, although it looked like a leading diagonal. As a trader, I continued to watch the position, still keeping my stop loss at 32.50. When the inevitable correction came down to the 50% retracement level followed by a smart bounce, I was all smiles. The speed of the rally from the end point of wave (2) was also perfect. But I couldn’t relax, because real money is involved. This is no arm-chair analysis. The stop loss had to be moved promptly to the low of wave (2) so that not only we preserve some profits, but also ensure we won’t get taken out by any unexpected event. As it happened, Silver came down and stopped the trade just below the wave (2) low. Then we got another rally, but there is no question of chasing it now. A trade has to work as anticipated. Any recovery after an extended fifth wave down move should be both RAPID and clean!

You now have an example of how one needs to monitor a trade even when it looked good. This is where a good adviser will help. I would have shared with you the need to move the stop loss to 32.80. Without that advice, you would still be thinking that everything is working out just fine. Some others might even attempt buying at 32.60 on the second attempt there, not realizing that professional traders are no longer interested in trading Silver from the long side just now. This is a terrific example for beginning traders to learn from. Nothing in the market is certain. However, we have to take risks at precise levels at the right time. Failure to act at the right time, both to enter a trade and to exit it will cause financial loss.


  • Ankur Aditya

    Dear Sir,
    This was the thing which i wanted you to focus for ur viewers as also written in an e-mail which i sent u yesterday. This art of managing trade is more important than anything else. Technical Analysis gives u a clue to anticipate unfolded move but a trader should be able to hold his/her nerves and act sensibly if his anticipation getting wrong. Latest move of silver is a perfect example which u have demonstrated so well this is the key thing which all traders should learn from u beside Elliot wave analysis.
    Thanks for ur quick response with a practical example.

  • Vasilios Vasiliou

    Dear Ramki,
    Greek stock index climbed today at 870 points (+85% from lows). UBS, in its recent technical report, referred to Athens General Index saying that this is the top performance in Europe for 2012. Do you think is worthwhile to post a new article for our index?

  • peter

    Re SIlver(QXAG)The most important empirically derived rule that can be distilled from our observations of market behavior is that when the fifth wave is an extension,the ensuing correction will find support at the level of the low of wave two of the extension.

  • chauhan

    ramki sir it’s not a triangle its a turned a ABC
    and now its returned from weekly 61%, and down by 5% prise
    i dont now whats the wave counts, but mis a opportunity

  • p kuamr

    Sir, i am very new to elliot wave and often get confusion in counting the waves.
    Here, as you have shown wave 1 @ 17110 on june 18, 2012. Why it cant be 17631 on july 10, 2012. Rest every has been made easier by you in following charts.

    Thank you for great learning material


  • Raghu

    Hello sir, Please updates your views in Gold and Silver .

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